By Bethany Blankley (The Center Square)
Texas and the U.S. oil and gas industry are pushing back against claims President Joe Biden made Tuesday night after implementing policies to limit domestic investment and production.
In his State of the Union address, Biden said, “We’re still going to need oil and gas for some time,” but he also said he plans to “tax the rich and the biggest corporations to pay their fair share.”
He criticized the oil and gas industry, saying, “Big Oil only reports their profits. Last year, they earned $200 billion amid the global energy crisis. I think it’s offensive.”
After his administration ordered banks not to invest in domestic exploration or production and extended billions of dollars in federal subsidies to so-called renewable energy companies, Biden said, U.S. oil and gas companies “invested very little of those profits to increase domestic production.”
He said he talked to industry executives who said, “‘We were afraid you were going to shut down all the oil wells and all the oil refineries anyway, so why should we invest in them?'” He replied, “We’re going to. At least. Another decade of needing oil… we will need… production.” Instead of investing in industrial production to “keep gas prices low,” Biden said, “they used record profits to buy back their own stock, rewarding their CEOs and shareholders.”
As a result, the president proposed quadrupling the tax on corporate stock buybacks “to close loopholes that allow the very wealthy to avoid paying their taxes.”
In response, Texas Oil & Gas Association President Todd Staples told The Center Square, “Nothing can hide the truth – while the president calls for more production from abroad, his administration has canceled pipelines, delayed permits, removed federal plantations while at home. Leased and discouraged investment in this important industry. Americans deserve energy security, and this administration has long treated oil and natural gas like assets, not liabilities.”
Texas’ oil and natural gas industry, which leads the U.S. in energy production, paid a record $24.7 billion in taxes and state royalties in fiscal year 2022, the highest in Texas history.
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“Punitive tax schemes targeting the energy Americans rely on for daily living will do nothing but reduce production and hurt consumers,” Staples added.
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Ed Longnecker, president of the Texas Independent Producers and Royalty Owners Association, noted that the president’s acknowledgment that “oil and natural gas are clearly needed” was a “positive” sign but that “the time frame given was completely unimaginable. In any realistic scenario, oil and natural gas are global energy sources. will play an important role in meeting demand, providing unprecedented economic contributions to our nation, and protecting our nation’s energy security for decades to come. To say otherwise is mere political rhetoric. Punishing energy producers is only hurting American consumers, driving up energy prices, and endangering our global allies. putting in.”
Longnecker also noted that “Texas produced record levels of natural gas and near record levels of oil last year, while contributing record levels of state taxes and state royalty payments.” The industry has also responded and risen above the “overwhelming pressure and regulatory burden it has faced from Washington.” That’s because the Permian Basin cut emissions by more than 76% and Texas’ natural gas industry fuels Europe, he added.
Kathleen Sagama, president of the Western Energy Alliance, representing Western companies that have fought the administration by canceling lease sales and permits, told The Center Square, “It’s unfortunate that Democrats feel the need to be anti-business. Enterprises like energy companies produce goods and services and pay wages that fund entire government and nonprofit sectors, yet the president never has enough.”
He also noted that “the oil and natural gas industry pays hundreds of billions in royalties, income taxes, severance taxes, property taxes and fees to federal, state and local governments. It’s interesting that the White House likes to bash American oil companies when they do well. , but never seem to be concerned in lean years or when investors make losses. Returning profits to shareholders is necessary at some point, otherwise why would investors risk their money unless there is some return on their money at some point?
“If people aren’t willing to risk their money, there will be no financing for oil and natural gas projects here in the United States, and Saudi Arabia will have to supply us with oil, the Saudi government will collect all the taxes from the U.S. government that we produce that oil here in America. We can, generate profits that create jobs and tax revenue and fund pension plans, or we can send those hundreds of billions of dollars to Saudi Arabia and Venezuela.”
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Tim Stewart, president of the US Oil and Gas Association, agreed, telling Center Square, “Frankly the president is the last person to be providing investment analysis for the oil and gas industry. But his administration has told Wall Street not to invest in our industry because we’re going to be under his watch – then he admitted last night that we’re going to be around a lot longer than his presidency.
“The administration that misread and then mismanaged the worst energy crisis in 40 years and drew down our Strategic Petroleum Reserve to cover up their strategic mistakes, while its policies drove prices to record highs is telling us that we need to ‘do the right thing. ‘ The same man responsible for the largest deficit on record and trillions in special interest payments is telling the industry that our investment strategy is flawed. Fortunately, Americans aren’t buying what he’s trying to sell.”
Richard Welch, a 20-year-old Houston-based industry executive, told The Center Square that the president’s proposal was “not only un-American, but anti-capitalist. The oil and gas industry is being penalized for not expanding operations despite his administration repeatedly saying it is the end of the line.” What is being attempted is hypocrisy.”
Syndicated with permission from Center Square.